PCBL share price surges over 6%, touches 52-week high after Aquapharm Chemicals acquisition for ₹3,800 crore | Mint
Active Stocks
Fri Feb 23 2024 15:58:13
  1. Tata Steel share price
  2. 145.50 -0.24%
  1. State Bank Of India share price
  2. 759.40 -0.86%
  1. HDFC Bank share price
  2. 1,420.90 0.08%
  1. NTPC share price
  2. 337.70 -0.54%
  1. ITC share price
  2. 411.60 -0.65%
Business News/ Markets / Stock Markets/  PCBL share price surges over 6%, touches 52-week high after Aquapharm Chemicals acquisition for 3,800 crore
BackBack

PCBL share price surges over 6%, touches 52-week high after Aquapharm Chemicals acquisition for ₹3,800 crore

PCBL share price surges over 6% to touch a 52-week high after acquiring Aquapharm Chemicals for ₹3,800 crore. Technical analysts expect the PCBL stock price to continue its uptrend, with a possible test of ₹280 and support at ₹255.

PCBL share price today opened at ₹261.95 apiece on BSE. PCBL stock price today touched an intraday high of ₹269.85 and a low of ₹260.15 apiece.Premium
PCBL share price today opened at 261.95 apiece on BSE. PCBL stock price today touched an intraday high of 269.85 and a low of 260.15 apiece.

PCBL share price surged over 6% to touch a 52-week high on Wednesday's trading session after the company acquired Aquapharm Chemicals for 3,800 crore. PCBL share price today opened at 261.95 apiece on BSE. PCBL stock price today touched an intraday high of 269.85 and a low of 260.15 apiece.

According to technical analysts, the PCBL stock price is in a strong uptrend, and after two-day pause, prices have resumed their upmove in today's session.

“We are seeing strong volume based move that augurs well for the bulls. expect this uptrend to continue where possible 280 may be tested, and 255 is likely to act as support," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.

According to Ruchit Jain, lead research analyst at 5paisa, the broader trend for the PCBL stock is positive. The price upmove has been supported by good volumes and hence, the upmove could continue. Investors with existing long positions can ride the trend. The 20 DEMA support for the stock is now placed at around Rs. 230.

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Also Read: New beer launch expected to boost United Breweries share price by 20%

In an exchange filing, the company stated that the PCBL Ltd board of directors had given its in-principle approval for the purchase of 212,172 shares of Aquapharm Chemicals Private Limited, either directly or through one of its affiliates, for a total consideration of 3,800 crores, or a 100% stake.

“The Proposed Transaction shall be financed through a mix of internal accruals and external fund raise by the Company and/or its affiliates/associates. This acquisition of ACPL marks Company’s foray into global specialty segments of Water treatment Chemicals and Oil & Gas Chemicals and it is the first milestone in achieving the vision of creating a multi-platform global specialty chemical business portfolio," the company said in its exchange filing. 

Also Read: Aster DM Healthcare share price jumps over 14% to a fresh 52-week high on sale of Gulf business

In its most recent report, domestic brokerage JM Financial stated that PCBL's acquisition of Aquapharm Chemicals for a cash consideration of 3,800 crores represents a critical turning point in the company's development into a major player in the specialty chemical industry.

JM Financial claims that Aquapharm has enough headroom to increase its current capacity from roughly 3,300 tonnes, given PCBL's obvious intent to increase its capacity for green chelating agents. The brokerage has maintained its BUY rating on PCBL with a target price of 290 until further clarification is obtained regarding the debt/equity structure to fund the acquisition, as well as the capex and growth plans for the acquired entity. The company's estimates and financials have not changed.

Also Read: BHEL stock gains nearly 4% after Ministry of Defence signs naval contract worth 2,956 crore

"The management stated that the valuation implies about 9.1x multiple on current EBITDA and 8.5x multiple on FY25 EBITDA. This, we believe, is a bargain deal for a world-leading differentiated chemicals player with several new and innovative chemistries and is in sharp contrast to the around 15-20x multiples commanded by other specialty chemical companies. 

The 8.5x FY25 EBITDA multiple implies FY25 EBITDA to be roughly about 450 crore. Even if we assume the transaction to be fully funded through debt (at ~10% interest cost), the acquired entity would still have a PBT of about 70 crore. This rough-cut calculation of ours gives further credence to the management's guidance of the transaction being EPS and EBITDA accretive one year post the acquisition," explained JM Financial in its report. 

Also Read: Gold price touches new peak as US dollar index hits three month low. Should you buy in this rally?

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 29 Nov 2023, 11:12 AM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App